Hacking NetFlix

Wal-Mart & Target Limiting New Release DVD Purchases to 5 Copies?

HomeMediaMagazine reports that Wal-Mart and Target are limiting customers to 5 copies of new releases, in an attempt to force Redbox to wait 28 days for new releases.

Wal-Mart Stores and Target Corp. have apparently begun limiting quantity purchases of new-release DVD movies to five copies per title — a move that further underscores an emerging sellthrough window and could pose a serious challenge to rental kiosks.

The world’s largest retailer, and Target, which represent two of the largest retailers of new-release DVD and Blu-ray Disc movies for the studios, instituted the policy Jan. 26 in time for the weekly new releases, according to Ted Engen, president of the Video Buyers Group, which represents more than 1,000 video stores.

via Davis Freeberg.

Industry Analyst Believes Warner Deal Will Hurt Netflix

HomeMediaMagazine reports that Industry Analyst Michael Pachter from Wedbush Morgan thinks the Warner Deal will hurt Netflix:

“The new release window may erode Netflix’s market share in favor of Redbox in the future, as the latter can secure new titles through retail workarounds,” Pachter said in a Jan. 25 note.

The analyst said he projects Netflix’s revenue growth to fall below 20% over the next several years, with downward pressure on average revenue per subscriber as increasing numbers of members join just for streaming and not DVD/Blu-ray Disc rentals.

Pachter, who maintains an “underperform” rating on Netflix shares, still expects the service’s recent consumer electronics partnerships to drive 750,000 new annual subscribers.

What do you think? 

How They Created the NY Times Interactive Netflix Infographic

Kevin Quealy on The Society for News Design site explains how they created the interactive Netflix infographic that let you explore rental patterns by region. Netflix was very careful about the data that they provided:

First is the data itself. Jo Craven McGinty, a CAR reporter, was in contact with Netflix to obtain a database of the top 50 movies in each ZIP code for every ZIP in the country. That’s about 1.9 million records. The database did not include the number of people renting the movie – just the rank. (We would have loved to have it, but Netflix said no. Understandably, it would have given competitors a perfect map of their market penetration.) 

Quealy explains how they designed the unique interface into the data by regions:

Still, the hardest part about this graphic was designing the interface. We wanted readers to be able to find a given movie quickly, but a search box didn’t really work visually. We also wanted to give readers an idea which movies were most popular and which were most critically acclaimed.

I mocked up at least ten versions. None were any good. The challenge was navigation. As a user, I wanted to be able to see one movie in a bunch of different cities, fast, or I wanted to see a bunch of movies in one city just as fast. So there are two major navigation elements – cities and movies – but the map itself still needed to be the visual focal point of the graphic.

SmartyRents: Netflix for Kid's Educational Software

SmartyRents uses the Netflix business model to rent video games for kids 9 months old to 10 years of age, with plans starting at $9.99 per month for 1 game at-a-time. 

 

I have two kids and it's really hard to find good educational software -- the titles can be expensive and if they stink they're not refundable, so renting is a great idea.

via Springwise.

Blockbuster Lowers Expectations; Blames Holidays & International

Blockbuster issued a press release announcing lower expectations for 2009:

"During the fourth quarter we redirected our efforts to restore top line performance, especially for the month of December as we tried to leverage the holiday season," stated Jim Keyes, Chairman and Chief Executive Officer of Blockbuster Inc.  "We increased inventory levels to support a higher in stock availability and invested in advertising to drive traffic in stores and online.  In spite of these efforts, our performance during the holidays was well below expectations and anticipated adjusted EBITDA was affected, specifically in the month of December where as much as 30 percent of our full year EBITDA has historically been generated.  Lower than expected international results also contributed to the change in our expectations."  

Blockbuster was saddled with debt during the spinoff from Viacom and is now fighting a multi-front war against Netflix, Redbox and Apple, and the company is today worth less than $80 million (Netflix's market cap is about $2.6 billion).

Davis Freeberg has an interesting idea on How to save Blockbuster:

Essentially what they’d need to do is create a “good Blockbuster” and a “bad Blockbuster” to isolate their problems. On one side you would have their DVD by mail program, their DVD kiosks and their digital business. On the other side, you would have Blockbuster’s traditional video store business that so many are quick to write off.

Together, the two businesses are slowly strangling Blockbuster, but split apart, they could free them from the impact of years of stagnation and ineptitude on their part. What I’m proposing is that they spin off their good assets and use that money to pay off their debt.

How would you save Blockbuster?

e-Drive Website Tracks USPS Electric Vehicle Plans

Netflix expects to be mailing DVDs until 2030, and the e-Drive website will be tracking the modernization of the USPS fleet under the e-Drive bill:

The e-Drive bill provides up to $2 billion for a two-phase, multi-track manufacturing and deployment program for 20,000 electric vehicles and 24,000 charging stations in the U.S. Postal Service fleet. Phase 1 provides funds for a highly competitive solicitation for electric vehicles (EVs), Plug-in Hybrid Electric Vehicles (PHEVs), and electric and PHEV powertrains for conversions. Phase II awards the best performing solutions with contracts for another 10,000 electric vehicles and 12,000 charging stations. The e-Drive bill also includes funding for utilities, Independent System Operators (ISOs), infrastructure and standards development, battery re-purposing and recycling, and training and education.

Netflix New Releases for January 26th, 2009

Click here for the full list of new releases this week (52).

Interesting titles include Surrogates, Saw VI, Whip It, Michael Jackson's This Is It, The Boys Are Back, Bright Star, St. Trinian's, I Hope They Serve Beer in Hell, Lost City Raiders, Little Ashes, Paris, Texas, and Dirty Jobs: Collection 5.

Xbox Engineering Team Shares Tips & Tricks for the Xbox 360 Netflix App

The Xbox Engineering Team Blog gives an inside look at the development of the Netflix application for the Xbox 360. The article includes a rare look at how Microsoft approached the rebuffering problem when the bandwidth rate changed:

• We have switched to using Netflix’s new, more advanced VC-1 encodings when available.  The VC-1 streams are much more efficient than their visually-comparable WMV9 counterparts. This allows us to better utilize available bandwidth by buffering more of the feature in less time.
• We have implemented something we are calling “Seamless Stream Switching.”  In the past, a starvation meant having to wait while the app rebuffered a new stream.  Now, we have the ability to detect a dip in bandwidth that would cause a starvation, and react before we actually starve.  Instead of forcing you to wait while the speed test and buffering is redone, we can prepare the new stream behind the scenes while playing out the old one.  See the next section for details on how it all works.
• Courtesy of Seamless Stream Switching, you can now switch up to a higher quality stream.  Previously, you would always be locked in to the lower bitrate stream if your bandwidth had degraded during playback.  Now, if your bandwidth improves sufficiently, your content bitrate could be upgraded as well.

They also have some tips on how to improve playback:

Since you now know some details of how our streaming system works, there are a couple of things you can do to potentially make the system work better for you.

First off, if you absolutely hate Mostly Seamless Stream Switching, you can prevent us from using it by watching all your content in Party Mode.  This works whether you watch by yourself or with others.  All you have to do is start a Netflix party. If you choose to do this and don’t want to see your Avatar, then use the On-Screen display and use Display Mode to switch.

Secondly, if you have a spiky or otherwise unstable Internet connection, the Pause button is your best friend.  Remember how I mentioned that the client will only consider switching down if 1) the buffer falls below a certain threshold, and 2) the buffer level had been decreasing over the last few seconds?  Well, when playback is paused, we will continue to read data from the network, but the buffer can’t decrease since playback has been halted.  Therefore, hitting the pause button right after playback starts and leaving the content paused for a short while (30 seconds, a minute or two, see what works best for you) is a cheap and easy way to force the buffer level to increase and potentially avoid a downward switch to a lower bitrate stream.

If you use the Netflix app on the Xbox 360 the article is a must-read.

Thanks to Richard for sending this in.

What Netflix Plan Are You On?

Several people have written asking for a breakdown of Netflix subscribers by plan, and Netflix doesn't share that information. I know a survey of readers of this blog won't exactly match the Netflix's 11 million customers, but the results should still should be interesting.

YouTube Quietly Begins Renting Movies

The YouTube blog reports that they will start renting movies this week starting with 5 titles from Sundance. 

These are early days and in the coming weeks we'll also invite a small group of partners across other industries, in addition to independent film, to participate in this new option. Anything that brings more content to the YouTube community is a good thing. And making content available for rent will give our partners unprecedented control over the distribution of their work -- they can decide the price of their videos and the rental duration; they can decide when and where their content is available; and they can keep 100% of their rights.

While YouTube is a long way from competing with Netflix's 18,000 streaming and 100,000 DVD titles, but it's great to see them offer content partners control over the pricing and duration of rentals. 

via Gowan & NewTeeVee.